Economic Growth, Income Redistribution and Poverty Reduction: Experiences from Rural Nigeria

The paper examines changes and the extent of poverty in rural Nigeria from 1996 to 2004. It investigates the contributions of growth and redistribution factors to changes in poverty within these eight years. The analysis is based on household National Consumer Survey (NCS) of 1996 and the National Living Standard Survey (NLSS) data of 2004 all collected by the National Bureau of Statistics (NBS). Using Shapley Decomposition Approach, the study reveals that the extent of poverty in the rural sector declined slightly during the second period of study (2004). Decomposition of changes in poverty into growth and redistribution components indicate that both the growth and the redistribution component were poverty reducing but at different magnitudes indicating that the deterioration of income inequality contributes to the worsening of poverty in Nigeria.